Today, the biannual Consensus Revenue Estimating Conference was held in Lansing. The conference included members of the House and Senate Appropriations Committees, the directors of the House and Senate Fiscal Agencies, the State Treasurer, Nick Khouri, and the State Budget Director, Al Pscholka. After hearing testimony from the Research Seminar on Quantitative Economics at the University of Michigan, IHS Markit, and senior economists from the House and Senate Fiscal Agencies and Department of Treasury, the principals came to an agreement on economic and revenue figures for the remaining 2018 Fiscal Year and the upcoming 2019 – 2020 Fiscal Years.
Through the upcoming Fiscal Years, both the General Fund and the School Aid Fund should see revenue growth, but on a small scale. In the 2019 Fiscal Year, General Fund General Purpose revenue is projected to be $10.3 billion, a decrease from the May 2017 estimate and the School Aid Fund revenue is estimated to be $13.5 billion, an increase of $134 million from earlier projections. Given the various economic factors presented today, the economic recovery period for Michigan is extended to eleven-years. Additionally, by 2020, Michigan will have replenished 84% of jobs lost and will return the state to job levels of the 3rd quarter in 2001. Another positive note is that the Michigan economy has diversified over the last twenty-years, making it easier to grow jobs and not have those numbers tied to vehicles sales by the Detroit three.
Additional highlights, include:
Risks to the Forecast:
The administration and the legislature will use the information presented today and the agreed upon revenue numbers to craft their budgets for the upcoming Fiscal Year. Governor Rick Snyder will present his executive recommendations in the coming weeks and the legislature will begin to introduce their budget recommendations shortly thereafter. In May the parties will hold another Consensus Revenue Estimating Conference to update and change numbers, if necessary, due to the latest economic data available.
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